Why LEGO Is So Expensive

[davychen]

I'm an ex-LEGO employee. I was an AFOL before joining LEGO and remain an AFOL after leaving LEGO.
Before joining LEGO, I too felt that many of the sets were overpriced (and this was back in 2016). However after being at LEGO for a while and seeing first hand the entire process of how a set is made (from design to engineering molds, to production, QC etc. etc.) I began to appreciate what makes LEGO simply amazing and why it is more expensive than other products. This is especially apparent when you visit a LEGO factory and just see the amount of care and quality control that goes into everything (I've been to Jiaxing & Kladno).

Now as an ex employee (left around 3 years ago) and still AFOL, yes I do feel that some sets are still overpriced (I still collect SW sets), but I don't mind as much now knowing everything that went into making the set.

[compatriot]

I feel the increasingly high price of sets is one of LEGO's largest setbacks. It prevents their audience from growing much and severely limits their appeal.

[vosifle]

Just look at other manufacturers of bricks (bluebrixx, keplay, wange, cada, cobi, happy build, decool, ...). Most of them offer sets of similar quality but these sets are less expensive. So Lego sets *are* expensive. It *is* possible to design, produce, deliver, ... sets for less money.

[warfreak]

They're expensive because we keep buying them regardless, and for the example of "costs to make: 20" "retail price: 200" is pretty average, they're charging 10 times the cost to make.
To put that in perspective, Gatorade costs about 2 dollars and is only 10 cents to make. That's 20 times more than it costs to make. Everything has to be significantly higher than the cost to make or how else can a business get off the ground.

[operastudio]

If you only count the cost of the plastic, then you're on the wrong way.
One high-precision mould (for ONE kind of brick) costs up to a million US$, and needs replacement after a certain time, to keep the bricks' dimensions perfect. And Lego produces hundreds of different bricks. Count that with the (correctly) mentioned HR, R&D, design, plus production costs (machinery, factories and energy needed), packaging, shipping, and last but not least, the reseller margin.
Lego products are expensive indeed, but it's totally wrong to say that Lego makes 10x the actual cost of the product.
I would be surprised if Lego makes more than 10~15% from the retail price.

[billnye]

The majority of their costs is paying the engineers to design the sets.

Engineers are generally paid $60-70hr. My Dad was a senior design technologist and was making $55/hr as he was a pay grade below an Engineer.

[schythebladerx]

Fun fact: legos in indonesia is absolutely way more expensive, like sets that are 40 dollars turn into 70 dollars, 80 dollar sets turn into 120 dollar sets, good thing lego stores/stores that has legos in indonesia usually has a lot of discounts

[puzzLEGO]

my main reasoning
- Lego can basically sell for quite a high price since its the only competitor and people still buy A LOT
-The LEGO brick machining has a tolerance of 0.0002cm, which is crazy because of the amount of pressure required to make it that precise, so the machines are most likely crazy expensive to buy and operate (especially for EVERY single mold for every single piece)

[piegao]

The answer to why LEGO is so expensive is that LEGO pay their designer and employee well, and their customer service cost a lot. I don't get why sometimes they have to ship free replacement pieces directly from Denmark. Won't the international sipping fee already cost higher than many small Lego sets? I have contacted Lego customer services a few times for things like simple inquiries or shipping address change, I must say based on the quality and efficiency of the customer services, the customer service representative must get paid a lot. Mcdonald's also includes licensed toys in their kids meal, but their meal is still so cheap that as an adult I still occasionally buy the kid's meal. Sometime for the toy (especially Pokemon toy), sometime just for the meal.

[LegoVlogger]

Each mold costs between $150K to $250K to produce. So, they need to substitute the cost of those as well.

[NotFromConcentrate]

Packaging comes down to how it it can be palletized. Before I started a business I wondered why some video card boxes were way bigger than they needed to be. When I started ordering 50-100 at a time the packaging made alot more sense as it fits precisely in a carton, that carton fits precisely on a pallet. It's true that shelf presence is a thing, but it has a real cost associated with it other than shipping. Many retailers make money selling shelf space to manufacturing not reselling their goods. This is called "rack jobbing." So making a box really big is a well researched and calculated move. Peace!

[Hendricus]

0:30 People from Germany: You sure about that? Like, there are countless other companies producing compatible bricks for a cheaper price and with a better quality (often including no stickers), like Cobi, a Polish company producing in the EU with only prints, and often complicated ones. And they at least gain in popularity here, because the biggest German Lego channel Held der Steine got 2 different conflicts with Lego, started by them over basically nonsense in the last few years, that he began putting a focus onto them that many others also got aware. Honestly, the US market needs to follow with this trend of showing other stuff than Lego to make Lego lose market share to them. Only when they are severely threatened by similar companies they are going to improve and go down with prices

[philbattiste]

There is a key factor being missed here: minifigures and unique parts. Fact is, the more unique minifigures and non-standard molds used, the greater the price of the set. This is likely due to the increased printing and molding costs associated with the unique pieces, but also the way the online market treats these pieces. If few enough sets have rare enough figures, the value of the individual figure skyrockets. One of my favorite sets, the SWTOR Corellian Jedi Cruiser, was worth a pretty penny. The build is good, but it also contained unique figures unattainable in any other set to this day.

[WilsonKullmann]

This is why I prefer rip-offs of Lego. For a quarter of the price of Lego, you get way more than a quarter of the quality of Lego.

[bluebear]

Lego still has not realized, that there is a whole plethora of legal competitors around - with prices well below of what Lego is asking. The bricks are basically no longer protected, only the figures are covered by a 3D trade mark.

[danielfarrellmusic]

Please mix the volume of your end card down. It is obnoxiously loud!

[bellissimo]

The problem here is that quality of LEGO is sinking, while prices are soaring. I recently saw a video of the large loop coaster set, with the high blue tower - the tower is covered in blue flat 2x2 plates, and it was immediately visible that there were irregular spaces between some of these plates - something unheard of from LEGO before. Not to mention the notorious issues with color accuracy in sets with a large number of supposedly same-color tiles, or the lack of printed tiles (fuck the stickers, seriously). Whatever the reasons, some of their competitors like Cada, Cobi or Bluebrixx have begun to achieve the same or better quality sometimes. Also - Cobi produces exclusively in Europe, unlike LEGO. It becomes increasingly difficult for me to justify spending top money for LEGO at this point.

[WickedMuis]

6:50 Shipping costs go generally per kg/pound, not so much the size. So bigger boxes with little to no extra weight doesn't add much, if any, extra shipping costs.

[jerryterwase]

Ever since Lego began getting so expensive, I had to resort to buying secondhand pieces in bulk from yard sales and building MOCs .

[dannybrezelhorner]

Considering how low quality the prints are these days I truly feel like they're overcharging